Tax codes for employees
The P9X form is used to notify employers which tax codes to use for employees. The latest version of the form has just been published and shows the tax codes to use from 6 April 2021. The forms states that the basic personal allowance for the tax year starting 6 April 2021 will be £12,570 (£12,500 in 2020-21) and this means that the tax code for emergency use will be 1257L.
The basic rate limit will be £37,700 (£37,500 in 2021-21) except for those defined as Scottish taxpayers who have a lower basic rate limit as well as an intermediate rate. Note, that the Income Tax rates and thresholds for 2021-22 are subject to confirmation at the budget.
As a result of the increase in the basic personal allowance, there will be a general uplift of tax codes with suffix 'L' which have increased by 7. Employers should therefore add 7 to any tax code ending in L, for example 1250L will become 1257L. The new form P9X is available online on GOV.UK to download or print.
The P9X (2021) form also includes information to help employers in the new tax year. The document reminds employers that have new employees starting work between 6 April and 24 May 2021 and who provide you with a P45 to follow the instructions at www.gov.uk/new-employee